14-12-2017 Dax Technical Analysis

Christmas is nearly here, I hope you have started your Christmas shopping.

The Dax is currently under pressure. We are being pressed lower and printing lower lows and lower highs (visible on the featured chart here). The arrows on this chart are pointing at the peaks of each lower high and the trend is clear to see. There are also two swap zones highlighted. The first swap zone is interesting because there is a Zig Zag marked out there and the 50% point of the Zig Zag is the balance point. A Zig Zag balance point is nice when you see the symmetry of the ‘sin wave’ and it creates a swap zone. The second swap zone is less pretty but it is still being respecting at the moment.

Yesterday we entered a buy trade, based on the algo, it didn’t work out this time and the spreadsheet has been updated, so you can see the recent trading performance history here: https://goo.gl/VDDzqk

14-12-2017 Dax Outlook

We have been waiting for a setup to emerge around the ‘switchback line’ visible on chart 1 below. Price action tends to exhibit particular behaviours around forks and median lines. Once price gaps above a median line, as we see on chart 1, it tends to retrace back to test the median line before continuing in the original direction. The price is currently below the median line and trading on the switchback line, around the lower quartile.

This presents another buying opportunity. I still remain bullish and look to buy dips.

14-12-2017 Dax Charts

Daily TPO (Market Profile)

60 Minute Chart

Daily Chart – longer term target zones

14-12-2017 Dax Key Levels

KEY LEVELS

POC *

13163

Value Area High *

13183

Value Area Low *

13125

14 Day ATR

143.13

200 EMA

12484

Daily R2

13233

Daily R1

13154

Daily Pivot

13112

Daily S1

13034

Daily S2

12991

*These are FXCM numbers, not futures numbers. Please be aware that FXCM can often be 5-10 points higher than futures prices

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If we are to remain bullish, and there is some momentum left, then I believe we have an interesting zone at 12191 initially, but that goes, then I am watching for price to be caught and held around the 12075-12125 zone, with an order of 12110 appealing to me. RSI on the hourly chart suggests that price is nearing oversold and beginning to show signs of divergence, but it’s too early to say for sure. I have marked out the zone I would be interested in.

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Looking at the hourly chart, there is a clear trend channel (bearish) and we have recently tested the channel support, if price bounces from here and remains in the channel then 12100 is a reasonable target. There is bullish divergence on the hourly chart, so if this move does complete then an interesting entry to me would be in the 11975-12000 zone. On the 5 minute chart we have entered back inside the bands and tested the mid-line (currently around 12050) before settling at the R1 (at the time of writing) and it’s looking pretty good for a selling opportunity, so once more, mixed signals.

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